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Manhattan Hedge Fund's $250 Million Bet on Real Estate Could be a Disaster

Alex Finkelstein Real Estate Channel
Manhattan Hedge Fund's $250 Million Bet on Real Estate Could be a Disaster - Manhattan - New York - property market


New York City-based hedge fund operator D.E. Shaw may know Wall Street investments' nuts and bolts but when it comes to commercial real estate, the company could be a big loser.



The Wall Street Journal reports the company may have until the end of this month to come up with enough cash to stave off a foreclosure filing made last month by London-based Barclays LPC and other lenders.

If it fails to do so, Shaw could lose its entire $100 million investment in the $250 million purchase of a 55,000-acre undeveloped site in suburban Albuquerque, NM, according to the WSJ.

D.E. Shaw is known on Wall Street for its obsession with computer-driven investing.

The firm surprised many real-estate deal makers in late 2006 by teaming up with Irvine, CA-based developer SunCal Cos. to buy the dirt--twice the size of Boston.

SunCal claims to be the largest privately owned developer of master-planned and mixed-use communities in the U.S., according to its web site.

Source



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